Effective Handling of Credit Card Interest

Credit card interest if handled effectively can work at your advantage. This would relate to the way credit cardholders use their cards.

Mostly, credit card users treat their cards as free money, meaning they can buy anything, in any amount and at any time. They end-up having huge amount of debt that they do not even plan how to pay.

On the other hand, responsible cardholders know how to use and manage their credit cards. They are also the people who are conscious of paying their outstanding balance in full and on time.

In effect, they are able to handle effectively the credit card interest by not leaving any balance on their cards. This will even provide great effect on their credit ratings.

Credit Cards

Credit cards are safe and convenient in making any purchases. This is true if the user is capable of repaying the balance on or before the specified time.

The following are some of the advantages of using credit cards over other forms of payments.

  • With credit card, you have the ability to purchase goods any time and make payment later.
  • With credit card, you are provided with the necessary protection from fraud and other unscrupulous transactions.
  • With credit card, you may opt to pay the balance in full or take advantage of paying over the period convenient to you.

Credit Card Interest

Credit Card Interest - Effective HandlingThere is one thing about credit cards that may require scrutiny, the credit card interest. The interest rates of credit cards may be higher than any other type of loans. This means the inability to repay the balance would result to paying interest that would be very costly.

Today, interest rate stands at the average of 18% as compared with a personal loan that is about 8%. Roughly, we can say that a barrowing of $1000 would yield a $180 interest in a year. Meaning, credit card is costly as a long-term borrowing.

On the other hand, credit card is reasonably cheap as a short-term borrowing. This is depending on the way you pay the outstanding balance.

If you only pay part of the balance, the remaining unpaid part will be charged with credit card interest. However, if you are able to settle the full amount you will not be paying any interest at all.

Therefore, card users should be responsible in charging their credit cards with the amount that they can conveniently pay. With these things in mind, you will be able to use credit card at a regular basis without worrying about having interest payments.

Although there is nothing bad to adopt paying credit card balance for a period, but we should also consider the high cost of interest especially on big amount of purchases. It is rather advantageous to get a low interest rate personal loan for huge borrowings.


It is safe to conclude that using credit card at the right perspective is the most reasonable way in having short-term borrowings and for effective handling of credit card interest.